Eros International to merge all-shares with STX Entertainment

In a first of its kind deal, Indian movie producer and distributor Eros International on April 18 said that it will be undergoing an all-share merger with Hollywood’s STX Entertainment to establish an equally-held global entertainment company.

The deal, which comes at a time the entire movie production sector is shut in major global markets due to the Covid-19 pandemic, will see STX merging into the NYSE-listed Eros International and making an enterprise with a $1 billion valuation, Pradeep Dwivedi, the chief executive for Eros International Media, shared.

Existing shareholders of Eros and STX will each have nearly 42 percent of the merged entity each, whereas the remaining 15-odd per cent will be with new shareholders, he said, adding that fresh capital of $125 million is being raised from STX’s existing investors, including TPG, Hony Capital and Liberty Global.

Over $75 million in commitments have been already received, while the rest will be tied-up before the execution of the merger, which is targeted to close by June-end, he said.

Dwivedi said a deal between the two organisations will bring together talent from Bollywood and Hollywood, resulting in collaboration on projects and jointly accessing the mega-market of China.

“The transaction will create the first publicly traded, independent content and distribution company with global reach and unique positions in the United States, India, and China,” said Eros in regulatory filings at stock exchanges. “The combined company, to be called Eros STX Global Corporation, will have a robust pipeline of feature-length films and episodic content with powerful and well-established positions in the world’s fastest-growth global markets,” it said.

The merged entity had revenue of $600 million for the calendar year 2020, and more than $300 million of suggested aggregated future revenue from STX Entertainment films already released in 2019, a statement informed.

Dwivedi said Eros’ Kishore Lulla will be the executive co-chairman of the merged entity, while Robert Simonds of STX will be the co-chairman and chief executive. He said Lulla and Simonds have known each other for over two decades and called it a “cultural fit” to lead the company.

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